Paradoxical story when the owner of Diana sanitary napkin company became a banker, and the 'big boy' aspiration with Michelin 3 stars in digital banking

12 years ago, the owner of Diana sanitary napkins "started" a banking business with a credit institution that was at the bottom of the industry rankings. In addition to bringing new ideas of the fast-moving consumer goods (FMCG) industry to TPBank, Mr. Do Anh Tu and his brother (Mr. Do Minh Phu) also promote the development direction of digital banking in Vietnam.

After about 5 years, Mr. Do Anh Tu and his brother became the first "outsider" bosses to successfully restructure a weak bank, making TPBank a bright star in terms of growth. profit, total assets and is a successful example of digital banking. However, despite being a pioneer in developing digital banking in Vietnam, TPBank is quite conservative in developing some services on its own applications such as buying bonds, gold...
Why did a businessman who was very open-minded and bold from the FMCG industry become more conservative than the bankers on the digital platform that this bank pioneered in developing? What's special about a businessman from the FMCG industry becoming a banker? Can a bank like TPBank - starting as a "small guy" - become a "big boy" in the entire system?

Opening the conversation, Mr. Do Anh Tu, Vice President of TPBank shared: "Previously, we were very tired doing FMCG, so after selling Diana, we had money, wanted to invest in the bank and thought we could be more leisurely." . But when I actually got into it, I realized that working in a bank is super hard" (laughs).

When a businessman working in FMCG moves to a bank, what's the difference?

As businesses, we move very quickly and are not afraid to change regulations. Meanwhile, bankers often strictly comply with regulations. In fact, past regulations cannot be changed, but from now on, what should be followed and what should not be changed is up to you to decide.

Second, more than 10 years ago, FMCG people were closer to customers than bankers. In addition, at that time, the economy was very thirsty for capital, banks were the center, not borrowers, and only businesses were paid attention, but individual customers were not taken seriously. Businesses are often the ones approaching banks, rarely the other way around.
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As FMCG people, we see that gap and strongly promote proactive outreach and regular communication with customers in general, in which the individual customer segment is a new development direction for the bank.

Third, we see that many bank products do not really match customer needs and banks are selling what they have rather than what customers need. I shared with you: "We need to create and sell what customers need, popularize banking services for millions of people, not just serve a small group like today."

How does your marketing experience from the FMCG industry help you when working in banking?

We are all affected by marketing, and marketing has four important things: First, what products and services to provide customers; What is the price offered? Where to provide services and how to promote the brand.

For banks, this is the business that provides money - the easiest type of interchangeable products (number 1 of number 1). Second is the price, the price of money depends on the level of risk, accompanied by easy lending and difficult lending. Price competition at this stage is also moderate.

In terms of brand promotion, the influence is only moderate when the goods and prices are relatively similar. So, the last thing left is where to provide products to customers.

In fact, fast-moving consumer goods companies are very good at making themselves visible to customers, not just developing distributors. At FMCG businesses, they will measure whether in each shelf, the goods are at eye level and whether they take up the largest area, which is extremely important. For example, at Diana, we have design software for each shelf in the outlet store, meaning that every product is placed where it is calculated.

With FMCG, customers only need 3 seconds to decide what to buy, so customers will buy the right type of familiar product. The problem is how to dominate the customer's "mind set". But this is not the case with banking services.

For example, a person plans to buy 4 boxes of toothpaste today and it only takes 3 seconds for this person to choose the brand that their whole family is using. But suppose this person decides to "buy now pay later" (buy now pay later - a form of credit) online, if he comes across an item he has wanted to buy for a long time and the need only then appears. So is the bank right next door to immediately provide that loan? If approaching customers is slow, by the time the bank is present, that need may no longer exist.

Therefore, banking business must be done so that everywhere, when customers have a need, we can immediately offer the service. As for how to do it, there are countless ways and constantly changing.

With TPBank, we lack physical "contact points" (branches, transaction offices), so we will have to think of a plan so that whenever customers need us, we are always there.

Having worked in both FMCG and banking, do you see how banking leaders are different from businesses?

Banking is an industry that controls risks and does business with people's money, so the perspective must be completely different. Normal businesses do business with their own money, so just doing the right thing is good. But banking is a business with other people's money deposited, the level of risk that needs to be controlled is very high, so there are many tasks for which the people involved must take direct personal responsibility and cannot delegate to anyone. But when doing it directly, there are too many risks, to the point of feeling scary...

However, after careful research, I understand that risk control in the banking industry has become a science, there are many tools, methodologies, models and all banks are controlled by the State Bank. very tight so it's hard to do anything wrong. Thus, if we continue to apply and comply with scientific standards of risk management in banking (which have been around for hundreds of years), it will not be as scary as the initial feeling.

The important thing when doing banking business is to understand that the money in the bank is not yours, so don't touch it. I'm just a money dealer, and I have to do it right, complying with the highest regulations possible, so bankers need to be somewhat conservative for that reason.

Another thing is that when I work in banking, I have to read a lot of documents, some days I stay up until 3 am to read all kinds of documents, regulations, Circulars... of the State Bank. But they (relevant agencies) keep sending documents. If you don't read them, you won't know what to do. But my duty is to be decisive, if I make a mistake, I'll know right away because it's people's money.

In addition, one thing that also shocked me when I first started working in banking was the business culture. For example, when I am in a business, the leader has great power. But when I went to work for a bank, the legal guy, the re-appraisal guy and the risk management guy had great power, I didn't dare say anything to these guys. If you don't understand something, you have to ask: ''Honey, what does this look like?'', then they will explain. If after listening, I find it reasonable, then I must respect him and not decide according to my own wishes.

In a business, the leader has great power, but in a bank, that is not the case. I only build the apparatus and operate it according to the regulations of the State Bank, and he does whatever part is his. In particular, legality, re-appraisal, and risk management at TPBank are called "three kings", no one can touch them and they will have to work independently.

Logically, bankers are often more conservative than FMCG workers. So when you switched from FMCG to banking, did you encounter difficulties because you were an "outsider" when operating?

Are not. We (brothers Do Minh Phu and Do Anh Tu - Reporter) do not encounter this problem. Because, we understand very well where we are sitting. What needs to be preserved must be preserved, what is not needed, why should it be preserved?!

TPBank's approach to problems is generally dynamic and creative thinking. For example, bank commercials, actors wearing flared pants, long hair, eating cake... and everything else in the world. But, our regulations related to customers and operational safety such as eKYC or bonds... we are quite conservative.

For example, TPBank has gradually pushed a series of services to the App but has not yet directly put the bond and gold trading service here because we do not want customers to misunderstand that the bonds belong to TPBank, so we separated. Here, we are concerned about legal risks, not whether it can be done or not.

If you go to TPBank's App, you will see it connects with other Apps to buy gold, buy bonds and customers have to enter the password again. Visually, we want customers to understand the separation between the two. Technically, it is quite easy to go straight to the other side, but legally, TPBank is more conservative than other banks, so we deliberately created another boundary fence.

In this case, TPBank is a mid-range bank, so we do not want there to be any misunderstanding with regulators. I would also like to add that TPBank's slogan is integrity and creativity. First you have to have integrity, that is, you have to chop first, then create based on the framework of integrity.

As for issues related to creativity, TPBank is quite open. For example, we invested a lot of money in digital transformation even though in the early stages we didn't know whether we would make a profit or a loss, for example.

In addition to understanding "what position you are sitting in", you did not have any problems when moving to run a bank, are there any other factors that support you?

Luckily, when we arrived, TPBank's people at that time were not too conservative. And in the selection process, we try to be as non-conservative as possible. As for conservative people who have such rights like the legal department, we persistently allow them to be conservative, but those who don't need it, like marketing, are conservative for nothing!

Another factor is the non-conservative personality that I inherited from my father (late businessman Do The Su) - he was an even more non-conservative person than me (laughs).

After successfully restructuring, becoming a "numbered" bank in the market but still at a mid-range scale, does TPBank aim to become the "big boy" of the banking industry?

Of course! All business people live by dreams and they must have a "Big Dream" to convey to the whole team. The way for us to achieve that "Big Dream" is the story with digital banking so that "small guy becomes big boy".

In fact, without switching to digital banking, TPBank would not be able to reach its current level. With more than 12 million customers and a small number of branches, we cannot serve customer needs without promoting digitalization. At the current point, nearly 98% of TPBank's products and services are experienced by customers via digital channels.

In the race to digitize, it is important not to be subjective and to always understand that all competitor banks are as smart as us or better than us, and many even have more potential than us. But anyway, as a pioneer, TPBank has an advantage in terms of time and experience. It looks like that, but if you enjoy the food at a 3-star Michelin restaurant, it will be completely different from anywhere else.

Anyway, there are bloody lessons that can only be absorbed and experienced through experience. Like the power failure of the TPBank data center located at FPT, all the banks using this service collapsed and it took TPBank about 45 minutes to recover. Then I woke up and saw that the way things worked in the past was not right.

When following the digital path, all thinking and infrastructure must change and run faster. When I talk about digital stories, I have to wholeheartedly try, observe and run as fast as possible. Besides, we must take advantage of being a pioneer but always not be complacent or subjective. And we always understand that, in the process of digital development, any move in the market must be continuously monitored and adjusted.

Why do you think digitalization plays such an important role in the process of making TPBank a "big boy"?

I think digitalization is a process that has a destructive impact on all old business models. And all new business models at this time must adapt extremely quickly to it. As for how to adapt, we need to follow a process of looking, observing, thinking, testing, concluding and then looking, observing, thinking, testing, concluding. It is a continuous cycle because no one knows exactly what the digital world will look like, but everyone is happy to imagine that world. And we've been through it.

The Covid epidemic is the clearest thing, showing that the world will definitely move in the direction of digitalization. All Vietnamese banks look in that direction, they all move very quickly, invest a lot and strongly. However, it doesn't look like that. No matter how good you are, if you want to make a bowl, you first have to knead the clay, shape it and burn it carefully and hard. Similarly, if you want to digitize, you must build infrastructure, collect data, connect data, analyze and build models... and connect with everyone.

In general, banking business must be done so that everywhere and everywhere when customers have a need, we can immediately invite them to receive services. As for how to do it, there are countless ways and constantly changing. But we still make our point of view clear to our employees: There is no other path than the path of digitalization.